Rare Earth – the Evolving Drama (Final Post)

THIS ORIGINAL POST WAS PUBLISHED MAY 14, 2011

 

Rare Earth – the Evolving Drama (Final Post)

In recent years quite a big number of publications touches the rare earth elements (REE) developments. Both mining gurus and newsmen exchange various ideas, make their valuations and projections.  What is the drama per se? In my opinion – who will be the first to challenge the market after the well-known announcement from China? In no way I am pretending to be one of gurus or pundits, but I do hope that some of the resources that I list may help anyone interested to obtain information for whatever purposes it is required. So, this final post on the theme I am making in a sort of Q&A narration.

I. What are the sources of comprehensive information on REE?

1. Quite obviously, the latest being Technology minerals. The rare earths race is on! April 2011 by Ernst & Young. These are the issues that are examined:

•  What are the short- and medium-term expected demand  trends for rare earths?
• What is the global stakeholder response to the rare earths supply issue: from the governments to the explorers and the end users?
• What factors are critical in analyzing a rare earths project?
• What sources of funding are available to develop a rare earths project?
• What challenges, risks and issues are inherent in exiting a rare earth project?

2. Rare Earth Elements: The Global Supply Chain by the U.S. Congressional Research Service - Prepared for Members and Committees of Congress  - analysis of US policy related to rare earth. Major highlights:       

• What Are Rare Earth Elements?
• Major End Uses and Applications
• Demand for Rare Earth Elements
• The Application of Rare Earth Metals in National Defense
• Rare Earth Resources and Production Potential
• Supply Chain Issues
• Role of China
• Rare Earth Legislation in the 111th Congress
• Possible Policy Options
• Challenge China on Its Export Policy
• Establish a Stockpile

 3. USGS publications.

3a. A list of all REE deposits (about 150 pages) was compiled in 2002 by USGS: REE Mines, Deposits and Occurrences

3b. Another fresh USGS publication:

 The Principal Rare Earth Elements Deposits of the United States—A Summary of Domestic Deposits and a Global Perspective – it also has a comprehensive information on world deposits

• The Rare Earth Elements
•        Basic Geology of Rare Earth Elements
•        Mineralogy of United States Deposits
•        Current Sources and Domestic Reserves
• The Principal Rare Earth Elements Deposits of the United States
• Phosphorite Deposits in the Southeastern United States
• Placer Rare Earth Elements Deposits

II. Any latest information on investment in REE?

1. A rather comprehensive source of information on REE is this Website: REE-Investor . According to Alexa there is not much Internet traffic to the site over the last three months, although it has an updated new page and what I consider the most valuable – a collection of 36 various reviews by the REE Guru Jack Lifton . Indeed, if you want to have a comprehensive picture of this industry segment – just read these comments! Beside that: The list of rare earth companies ; Under Company reviews:  Avalon Rare Metals,  Rare Elements Resources. There is no information on who runs that site – but I have a suspicion that it is Mr. Jack Lifton himself?

2. Another list of REE companies is in Investing in rare earth elements with updated REE news

3. Discussion on Seeking Alpha Why Investors Should Be Cautious of Rare Element Resources and comments

4.  Market Vectors® Rare Earth/Strategic Metals ETF (REMX)

 Source: Investment Case for Rare Earth/Strategic Metals

III. Is there any latest practical information for businessmen, starting REE venture?

1. The cited above E&Y study

 Source: Technology minerals. The rare earths race is on! April 2011

Funding and other practical issues, including suggested business models are in detail described in

What sources of funding are available to develop a rare earths project? and in Appendix 3 — What models have been used in practice to develop a rare earth project

 2. Reading The Principal Rare Earth Elements Deposits of the United States—A Summary of Domestic Deposits and a Global Perspective you may pay attention to the section Developing a Rare Earth Elements Mine, that besides other various useful information has this table:

This concludes my foray into REE; and I hope that this may bring some value to general information exchange in mining industry over the Internet.

Rare Earth – the Evolving Drama (Part II)

THIS POST WAS ORIGINALLY PUBLISHED MAY 13, 2011

Rare Earth – the Evolving Drama (Part II)

Note: this is re-post of my 2009 Blog - some links maybe outdated, but I provide  2011 updates too

Aside Chinese companies there are very few private or publicly traded REE companies. In this final part of my narration, I will look into them based on the size of projects.

Outside China there are four major REE tenements in the world that are being developed. This picture from Greenland Minerals and Energy Ltd latest corporate presentation gives a general understanding of potential:

 (Update from 2011: you may go to this page to look at the project

As I mentioned in the previous Blog post Greenland Minerals and Energy Ltd is emerging as one of the most attractive players in the REE market. A lot of materials are on the corporate Web-site, as well as in these references:

·                  GREENLAND MINERALS AND ENERGY LIMITED (GGG) Page on ASX – complete information on the company

·                  Kvanefjeld Rare Earths Project Takes a Step Closer to Reality by Metal Miner that discusses plans for AIM listing by Greenland Minerals and Energy Ltd

·                  Greenland Minerals and Energy: UraniumLetter places $1.20 share price target by Proactive Investors

 Another major resource of REE is the open-pit mine at Mountain Pass, California, which is developed by  Colorado-based Molycorp Minerals. Completed description of the tenement is provided here.  As I cited in my previous post, you may read the report prepared by the Molycorp Minerlas, that was prepared for Congressional Leaders  in January 2009. A very good discussion on the American REE deposits is submitted by Jack Lifton  in Seeking Alfa – with good links to some video materials. (Also read Jack Lifton’s The Rare Earth Story). Mountain Pass has a long history, and in the XXIst century it seems that it is started resurrection – when after 15-years of regulatory reviews in 2004 Molycorp started its 30-years mining plan.  It is supposed that by 2012 mining will resume at Mountain Pass at the rate of 1,000 tons of ore a day.

The Thor Lake Rare Metals Project is developed by AVALON RARE METALS INC. and is located approximately 100 km southeast of the City of Yellowknife, Canada. Watch this interview with Avalon CEO and at the 2011 update on the development of the project.

Mount Weld REE deposit is being developed since 2001 by  Lynas Corporation Limited – an Australian miner that is listed in America (Pink Sheets) and Australia (ASX). The company has developed a remarkable RED (Rare earths direct) Integrated Supply Chain that is well described it its 2009 Annual report. Detailed description of the latest developments in Mount Weld Project are provided in Lynas Presentation at the 5th International Rare Earths Conference . This year witnessed a number of significant events for Lynas: initially everything looked like China Non-Ferrous Mining was going to buy 52% of company’s equity but in September the Australian regulators blocked the deal. This lead to market fund-raising effort which ended in November with A$450 million. 

LYNAS CORPORATION LIMITED (LYC) ASX page with all relevant information

Arafura Resources (Australia) operates a Nolan Rare Earths project in the Northern Territory of Australia and at this time is also in the process ofgetting investments from Chinese company. The company describes its projects in this presentation. All information can be found also in ASX page. 2011 Update: Arafura Resources – On Track to Supply Rare Earths To Users Worldwide in 2013

Great Western Minerals Group Ltd. is a Canadian-based company with six rare earth exploration and development properties in North America with an option to participate in the development of a sizable property in South Africa. More information on the company is on their Web-site and here.

 

From investor point of view, REE provide an excellent opportunity. Just look at this stunning evolution of prices:

 Source: from Greenland Minerals and Energy 2009 annual report

The global economic slowdown (starting from the end of 2008) resulted in inventory destocking in many industries – trying to preserve cash many industries used their existing inventories. This resulted in significant plunge of raw materials prices – that is surely true for REE. However, with recent developments in China, many analysts speak about emerging deficiencies of REE on the market. That would certainly bring the prices to the old levels.

Some useful links:
Greenland Minerals and Energy 2009 annual report – first-rate detailed description of REE world market
A  valuable update on the “5th International Rare Earths Conference” is presented by The Anchor House, Inc. Rare Earths at Center Stage: Happy in Hong Kong
Investors Take a Closer Look at Rare Earth Elements 
USGS Commodity Mineral Survey of the Rare Earths released in September 2009 
Rare Element and Rare Earth Element Mineralization and Exploration in Ontario 
Rare Earth Elements 
Developing Australia’s rare earths industry by Arafura
Interest in rare earths stimulated by concerns over possible Chinese export curbs – by Mining Weekly
Rare earths are vital, and China owns them all